Recently, Microsoft released Internet Explorer 8, which boasted much better standards compliance than previous iterations of the browser. While it passed the Acid2 test, IE8 failed miserably in the Acid3 test, and many people criticised Microsoft for it. Microsoft Australia's Nick Hodge has stated that Microsoft purposefully decided not to support Acid3, because the test tests against draft standards.

I think it's entirely fair that they do not have to support a moving target. Sure it would be nice but I think this is a reasonable argument as to why they are currently not trying to pass 3

It isn't a reasonable argument. The standards asked for by Acid3 are five years or more old. Current and future further developments of those standards won't break lower levels, so passing Acid3 now won't be a nugatory effort as Microsoft imply.